Aluminium futures on the Multi Commodity Exchange (MCX) have been on a rally since early March. It rebounded on the back of the support at ₹200.
Last week, the contract broke out of the resistance at ₹226. Early this week, aluminium futures hit a record high of ₹238.15 and the price action indicates that further rally is possible.
The nearest notable support from the current level is the price band between ₹250 and ₹255. A breakout of ₹255 can lift aluminium futures to ₹275.
On the other hand, if the contract falls from here, it can find support at ₹230. A break below this can turn the outlook weak for the near-term, possibly leading to a fall to ₹220, where the 20-day moving average currently lies.
Trading strategy
Buy aluminium futures at the current level of ₹237 and add longs if the price dips to ₹232. Place initial stop-loss at ₹228.
When the contract touches ₹245, tighten the stop-loss to ₹238. Book profits at ₹250.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.